Germany and Italy demand the return of $245 billion in gold from the US
Germany and Italy are facing growing calls to move their gold reserves out of New York, amid escalating political attacks by US President Donald Trump on the Federal Reserve and rising geopolitical tensions.
“There are strong arguments for moving more gold to Europe or Germany in turbulent times like these,” Fabio De Masi, a former member of the European Parliament for the left-wing Die Linke party, told the Financial Times.
Germany and Italy rank second and third in the world in terms of national gold reserves, after the United States, with the former holding 3,352 tons and the latter 2,452 tons, according to data from the World Gold Council.
Both countries rely heavily on the Federal Reserve in New York as a custodian, with each storing more than a third of their reserves in the United States.
The market value of this stored gold is estimated at approximately $245 billion, according to the newspaper’s estimates.
This reliance is largely due to historical reasons, in addition to New York being a global center for gold trading, along with London.
But Trump’s erratic policies and growing geopolitical turmoil have sparked public debate in parts of Europe about whether these reserves should be kept in the United States.
Trump had stated earlier this month that he might have to impose something if the Federal Reserve didn’t cut interest rates.
In Germany, the demand to repatriate the gold has begun to attract support from across the political spectrum.
Peter Gauweiler, a former senior conservative lawmaker in the Christian Social Union (CSU), said that the Bundesbank “shouldn’t take shortcuts when it comes to protecting the country’s gold reserves,” emphasizing, “We must ask whether storing gold abroad has become safer and more stable over the past decade, and the answer is becoming clear in light of the growing geopolitical risks”.
For its part, the European Taxpayers’ Association sent letters to the finance ministries and central banks of Germany and Italy, calling for a review of reliance on the Federal Reserve as a custodian of gold.
“We’re deeply concerned about Trump’s manipulation of the Federal Reserve’s independence,” said Michael Jaeger, president of the association.
“Our recommendation is to repatriate German and Italian gold, ensuring full control over it by European central banks at all times,” he added.
Ahead of Italian Prime Minister Giorgia Meloni’s visit to Washington in April to meet with Trump, economic commentator Enrico Grazzini wrote in Il Fatto Quotidiano, “Leaving 43% of Italy’s gold reserves in the United States under the unreliable Trump administration is a major risk to the national interest”.
A survey conducted this week of more than 70 central banks around the world showed that an increasing number of them are considering storing gold domestically, amid concerns that their reserves would be difficult to access in the event of a crisis.
The subordination of European central banks to the Federal Reserve as custodians of gold has long been a point of controversy.
Western European countries accumulated massive amounts of gold during the post-World War II economic boom, when they ran large trade surpluses with the United States.
Until 1971, dollars could be converted into gold through the Federal Reserve under the Bretton Woods system of fixed exchange rates.
Storing gold across the Atlantic was also seen as a hedge against a potential war with the Soviet Union.
But France, in the mid-1960s, moved most of its gold reserves to Paris, after President Charles de Gaulle lost confidence in the Bretton Woods system.
In Germany, a popular campaign titled “Bring Back Our Gold” was launched in 2010, prompting the Bundesbank to change its policy.
In 2013, the central bank decided to store half of its reserves domestically, moving 674 tons of gold from New York and Paris to its headquarters in Frankfurt, in a major security operation costing €7 million.
According to current data, 37% of Germany’s gold reserves are still stored in New York.
